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Dear Fellow Investor,
There’s Still Time to Short These Sinking Cruise Stocks
Cruise stocks are starting to sink—and fast.
Amid rising geopolitical tension between Israel and Iran, there’s growing fear that conflict in the Middle East could spiral into something far worse. And when fear enters the market, discretionary travel stocks like airlines and cruises are often among the first to take the hit.
That’s especially true when oil prices are surging.
Crude just popped higher on renewed uncertainty over the Iran nuclear deal, following direct threats of military retaliation. U.S. Gen. Michael Kurilla confirmed that strike plans have already been presented to the White House, and Iran has responded by threatening to target American bases if provoked.
Naturally, oil prices soared. And when oil rises, cruise lines feel the pain on two fronts: rising fuel costs and falling consumer demand.
It’s no surprise, then, that cruise stocks are now reversing sharply—and we think they have much further to fall.
Let’s take a closer look.
Company: Royal Caribbean (SYM: RCL)
A Technical Breakdown
For a while, the party was raging aboard Royal Caribbean.
The company posted strong earnings. Consumer demand for cruises surged. And the stock ripped higher—rising from a low of $165 in April to a peak of nearly $290 in early June. That’s a stunning gain of more than 75% in just two months.
But then came the hangover.
As we warned earlier, this run was fueled by greed more than fundamentals. RCL became technically overbought across the board.
Take a look at the chart:
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Relative Strength Index (RSI): Approached the 70 level—classic overbought territory.
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MACD: Topped out and began to cross to the downside, signaling a momentum shift.
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Williams’ %R: Dipped from extreme highs, another early sign of a trend reversal.
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Price Action: The stock failed to break through previous resistance at $290, forming a double top—a bearish pattern suggesting exhaustion.
Last trading at $257.90, RCL is now rolling over. If this selloff accelerates, we believe shares could fall back to $230, an area that acted as support in April and May. If that floor breaks, the next stop might be $210 or even the 200-day moving average near $195.
Until geopolitical tensions ease and oil prices stabilize, shorting RCL—or at the very least, staying away—is the more prudent play.
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Company: Carnival Corp. (SYM: CCL)
Another Ship Taking on Water
Carnival shares also ran too far, too fast.
From mid-April to early June, CCL soared from roughly $15 to $24.66—a gain of more than 60%. But just like RCL, the rally left it overbought and vulnerable to any negative headlines.
Now those headlines are here.
Carnival has already pulled back to $22.26 and looks poised to test more downside.
Technically:
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RSI is rolling over from overbought levels.
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MACD has begun a bearish crossover.
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Williams’ %R confirmed the momentum shift early.
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Support: If CCL breaks below its 200-day moving average, the next level to watch is $21 (its 50-day moving average). A further breakdown could take it to $19—a level it last tested in early April.
CCL may look “cheap” on the surface, but with volatility rising, it could easily get cheaper.
Company: Norwegian Cruise Line (SYM: NCLH)
Weakest of the Three?
NCLH didn’t participate in the rally with the same gusto as RCL or CCL, which could be a red flag in itself.
After rising from around $15 in April to a high near $21.60 in late May, the stock has already retraced below $19. Technically, this stock has been showing relative weakness for weeks.
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RSI has stayed muted.
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MACD is already in bearish territory.
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Williams’ %R flagged a top before the broader group even started falling.
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Support is just under $18. If that fails, $16 is next.
Among the three cruise names, Norwegian may be the most vulnerable to further selling—especially if geopolitical tensions worsen and discretionary travel gets cut from consumer budgets.
The Big Picture: Why We’re Still Bearish
Let’s zoom out for a moment.
Even if oil prices stabilize temporarily, the risk of a prolonged conflict in the Middle East still hangs over markets. With the U.S. pre-positioning forces and Iran threatening retaliation, this situation could escalate at any moment.
For cruise operators, that means:
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Rising operating costs (fuel)
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Falling consumer demand (travel hesitation)
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Market rotation into defensive sectors
Even with solid earnings and demand metrics, these headwinds are difficult to overcome. And when greed has already taken stocks far above their sustainable levels, the risk/reward profile clearly tilts to the downside.
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